Egat mulls more LNG imports amid low prices

Egat mulls more LNG imports amid low prices

The state-run Electricity Generating Authority of Thailand (Egat) is studying the feasibility of a third importation of liquefied natural gas (LNG) in order to take advantage of the baht's appreciation and low gas prices in the global market.

Tawatchai Jakpaisal, Egat's deputy governor for fuel, said the third shipment for LNG is planned at roughly 1 million tonnes for three of Egat's gas-fired power plants: South Bangkok in Samut Prakan, Bang Pakong in Chachoengsao and Wang Noi in Ayutthaya.

"Egat wants to respond to the government's policy to accelerate massive import of fuels after the LNG reference price from the Japan-Korea market dropped to US$4 per million British thermal units recently, compared with $7 per million BTU last October," Mr Tawatchai said.

"The locally produced natural gas has a price of $7-8 per million BTU, cited from the state pipeline pool price," he said, "so Egat has to seek other possibilities to maintain or cut power tariffs."

Mr Tawatchai said Egat plans to proceed with the third LNG shipment in the first half, therefore the shipment will be delivered in the third quarter of 2020.

Egat is waiting for the second delivery of 65,000 tonnes to reach Map Ta Phut port in Rayong in April.

The first shipment was completed in late December at the same volume.

Malaysia's Petronas LNG was selected last November to deliver two LNG shipments for Egat. The 130,000-tonne volume is stored at the LNG receiving terminal owned by PTT LNG Co.

Mr Tawatchai said these two LNG shipments are part of Egat's trial period as an LNG handler because the government is allowing free trade in LNG and promoting the country as a gas hub.

Egat is now the second shipper and holds an import licence after PTT monopolised LNG trade since 2011.

Mr Tawatchai said the lower price of LNG in spot markets globally is an opportunity to reduce consumer's power bills and preserve the country's natural gas resources that are the raw materials for petrochemical production.

Egat predicts electricity demand in 2020 to rise by 4%, due to higher temperatures.

Mr Tawatchai said Egat plans to develop a 1,400-megawatt gas-fired power plant in Surat Thani.

The project will occupy the existing site of a retired power plant using oil as the fuel.

"It is possible to commence an operation date two years before the previous schedule of 2027," Mr Tawatchai said. "Egat will consider choosing gas facilities at either the receiving terminal in Rayong or at the new development of a floating storage regasification unit in the ocean."

The Surat Thani power plant is targeted for development because two of Egat's planned power plants in Krabi and Songkhla have been postponed with no schedule for beginning development.

Meanwhile, electricity demand in the southern region is growing rapidly.

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